Airbnb buys HotelTonight. Battling OTAs and moving into flights….

Airbnb is accumulating a heap of data around our accommodation and travel habits. That we know; as every new user adds a layer to the mine of information it can tap, its options expand. As yet that’s an intangible that might be undervalued in an IPO. There, revenue and headcount growth are big measures.

The purchase of HotelTonight, according to Airbnb, gives it the chance to “accelerate our work to build an end-to-end travel platform that serves everyone.” Airbnb wants want to own the customer and the booking journey end to end. For the room sharing app, Airbnb considers the acquisition positions it better for an imminent IPO.

It certainly widens the value proposition by attracting a new, lucrative customer segment: people who prefer a boutique hotel over private accommodation.

It should also strengthen customer loyalty, as there’s now a bigger breadth of properties available. Now there’s an Airbnb offering no matter whether someone is on a business trip, family holiday or city break.

For those very valuable corporates who’ve been nervous about Airbnb on matters like security, duty of care and ease of making contact, especially for women travellers, the option of using a hotel and its services can perhaps get them over the line too. That offers a valuable opening where perhaps none might have existed before.

The acquisition also entrenches the last minute space occupied by HotelTonight, which is currently not well covered by Airbnb. Their average booking window varies and is driven by the hosts. Some don’t even accept same day bookings.

And selling boutique hotels at the last minute is another step in the direction of competing more effectively with Expedia and Booking.com. But, this is as much about simple growth! Airbnb’s target is reportedly to secure more than one billion annual guests by 2028. It would be tough to achieve this without breaking into the traditional hotel space.

HotelTonight works with independent hotels, but also many chain hotels in its network of cities around the world. While Airbnb says it won’t deal with the major chains like Sheraton and Hyatt, it will benefit strategically from these hotel relationships.

It’s more than tempting to think Airbnb is heading towards direct distribution. Certainly, Airbnb has been clear in the past that it wants to know all about us as we travel. According to CEO Brian Chesky in an interview with PhocusWright, Airbnb sees OTAs as a major target.

Most significantly, Mr Chesky confirmed the company is looking into “activity around flights” – which will come as no surprise to anyone who’s watched Airbnb expand laterally and vertically.

Mr Chesky believes that introducing flights is a logical step for the company, but he is ready to wait for the right time to take that big step into the market.

You certainly couldn’t say that Airbnb are rushing into the airline idea though. The talks have been taking place for a long time. This time last year The Blue Swan Daily reported on this topic after an interview with the Airbnb boss appeared in The Sunday Times.

He was quoted as saying: “We’ve seriously considered a lot of things around aviation and we’ve spent a lot of time exploring different concepts. We definitely want to make sure, though, that we can get into the end-to-end trip business.”

But thoughts on the move date back almost a further year. Mr Chesky tweeted a suggestion about a potential airline project back in Apr-2017, stating: “Let’s say you could wave a magic wand and have the perfect flying experience, what would that look like?” He also noted “Flying is an experience waiting to be reimagined” and questioned “what if flying was the best part of travelling?”

Many believe that the airline business is an attractive proposition for disruption and the slow speed that legacy operators reacted to the arrival of low cost carriers and have been slow to adopt digitalisation and technology strategies suggests the door could be open to a nimble disruptor such as Airbnb.